Dunkirk awaiting HUD report on CDBG?funds

October 7, 2013

The answers should be coming sometime before the end of the year. That was the report from Dunkirk Mayor Anthony J. Dolce after a recent meeting with officials from the United States Department of Housing and Urban Development about the city's prior use of Community Development Block Grant funds.

The issues with the CDBG funding have been the subject of meetings since 2012 and a resolution could have several outcomes.

"Basically, we'll be getting a written report within the next 60 days on what we need to address. There will be some payback of funds, but we'll have an opportunity to get the city back in good standing," Dolce explained. "They gave us preliminary numbers, so we'll know for sure when the report is finalized and we receive it. Then, we'll have a chance to respond and look to whittle that number down."

Dolce was asked if there was a preliminary figure he could announce.

"Not at this time. I'd like to see what HUD puts formally; which will be released, not only to the city, but the press as well, when they put that out," he replied. "They said within 60 days, but with the government shutdown, I don't know if that timeline is affected."

Dolce was asked if HUD officials spoke of further investigations as to possible criminal liability.

"They did not," he replied. "My concern is getting this right. We're going to have to pay back money and we need to make sure we're using this money in HUD-eligible ways. That's my priority.

"My mindset is this, they're going to issue a formal report within the next 60 days. My administration needs to address that report. So regardless of what took place or didn't take place, to me, is mainly immaterial. We need to worry about what's in front of us and running a successful HUD program for as long as I'm here."

As for payback options, Dolce said HUD was weighing a few options. He added the least likely option would be for the city to receive less for a number of years until the difference is made up.

"I also should say there's a possibility of doing a combination of options, but that comes next. First thing that could happen is you make the checks payable out of your general fund to the HUD accounts. Another scenario, you pay the money back to your HUD account, so you increase your HUD-eligible programs for that year and subsequent years," he explained. "The third is a reduction in your grant award. So they did mention the possibility of not one specific, it could be a combination of the three or two."

Dolce said the second one would be the best option as, "You'd be able to put it right back into HUD-eligible uses."

"What they did indicate was if we did a good job, if we demonstrate that we're getting on the right track, that is the most likely option; that we'll be able to use city funds back into HUD programs or HUD work I should say."

Asked what would be the worst case scenario for city taxpayers, Dolce took an optimistic view.

"We have an opportunity to pay this back and still put on good programs and good uses of the money," he replied. "A priority of ours is infrastructure, we have a lot of infrastructure needs so that to me is a phenomenal use of HUD dollars. Demo is another great use. So we have some great options to use this money in the payback scenario."

Dolce said the city's 2014 budget, which he is required to present to Common Council by Oct. 15, won't reflect what HUD decides.

"It could come during that year, that's definitely a possibility that we'll have to make some changes. But until we get the report within the next 60 days I don't want to speculate," he added. "We'll have to put out some contingencies and work out a repayment plan. That's to be determined how we do that and then depending on how we do that we'll have to budget "X" amount of dollars out of the general fund to accomplish our needs, our debt, so to speak.

"It was an in-depth meeting but once the report comes we'll be able to better address everything."